Welcome to Gemini!

Today, my brother Tyler and I are proud to announce Gemini: a next generation bitcoin exchange. What exactly do we mean by “next generation”? We mean a fully regulated, fully compliant, New York-based bitcoin exchange for both individuals and institutions alike. Why? Because it’s about time.

But before I go further, I’d like to take a moment to explain how we got here. Our interest in Bitcoin began in 2012. It was immediately obvious to us how awesome and powerful this technology was. People laughed, as they always do, when something is awesome, powerful and new, but that only helped to fuel our fire. Over the past two and a half years, we have spent a great deal of time educating ourselves and others about Bitcoin; investing in bitcoin; investing in Bitcoin-related companies; filing an S-1 registration statement with the Securities and Exchange Commission to create the Winklevoss Bitcoin Trust (an ETF focused on bringing bitcoin investment exposure to main street investors) which will list on NASDAQ; and launching a bitcoin price index called WinkDex that will price our ETF (online, iPhone, Android).

When we began our ETF journey, we soon concluded that a US-regulated ETF wasn’t enough. A growing number of US investors, traders, financial institutions and businesses wanted to get involved with bitcoin directly, but had no options other than to trade overseas or sit on the sidelines. So, we began looking into exactly what it would take to create a US-based bitcoin exchange. During this time, and almost one year ago to the day, we testified at a public hearing at the New York State Department of Financial Services (NYSDFS) regarding the development of virtual currencies and their promise. The two days of hearings were watched by close to 15 thousand people in 117 different countries, commonwealths and territories. Coming out of these hearings, it was clear to us that NYSDFS Superintendent Benjamin Lawsky and his staff understood the potential of this technology and were committed to building a regulatory framework that would both protect consumers and foster innovation in New York. It was also clear to us that Gemini had just found its home.

Since last February, Tyler and I have been assembling the Gemini team. Our goal was simple: bring together the nation’s top security experts, technologists, and financial engineers to build a world-class exchange from the ground up with a security-first mentality. It’s true that Bitcoin’s promise is a new, frictionless money, but that all becomes academic if we don’t build towards an ecosystem that is free of hacking, fraud and security breaches. Today, our team is 14 strong (including me and Tyler), 11 of which are pure tech engineers. Our team spans both coasts and embodies decades of tier 1 work experience.

We are also thrilled to announce that we have secured a banking relationship with a New York State-chartered bank. This means that your money will never leave the country. It also means that US dollars on Gemini will be eligible for FDIC insurance and held by a US-regulated bank. Your US dollars on Gemini will be as safe and secure as they are in your bank account today.

So, why the name “Gemini”? After white-boarding a list of possible names for several weeks, we settled on Gemini for a host of reasons. Gemini is the Latin word for “twins” and as such, it inherently explores the concept of duality. We were drawn to this both because of the two worlds of money (old and new) that will intersect on the Gemini platform as well as the two-way nature of trade that it will facilitate. But that’s not all. Once we picked our name, a fun fact emerged. We realized that NASA’s Project Gemini was a spaceflight program focused on laying the groundwork for Apollo’s later mission to land man on the Moon. As such, it was coined (no pun intended) man’s “bridge to the moon”. In this spirit, we’ve built Gemini to be “your bridge to the future of money”. Oh, and Tyler and I just happen to be identical twin brothers.

The innovation of Bitcoin and widespread adoption of virtual currencies is not an if, but rather when. This was always going to happen. Please join us for the ride.

Join the Discussion

mbranton

Guys,

What is the rationale for building an exchange from scratch rather than licensing an established platform? A first tier platform like Nasdaq OMX is accessible and fast-to-market if you have the funds. Second-tier platforms such as those used in HFT firms, or smaller international exchanges still have years of vetted operation under their belts, as well as substantial engineering expertise as well as provide a smooth transition from slow trading to sub-millisecond direct market access. I would take such a platform over a custom built one any day.

There is nothing inherently special about bitcoin trading on exchanges. A bitcoin is the same as any other exchange traded instrument. So the difference is in the security of deposits, withdrawals, and multi-tenancy front ends for accounting, auditing, order entry and management, etc, all of which are much easier constrained problems than tackling an exchange infrastructure. There are also licensed third party solutions to some of that ecosystem already available, again, no reason to reinvent the wheel.

I look forward to seeing what you bring to the table, but new is not always better. If you are going to make the first regulated Bitcoin exchange, stick with the tried and true, building something entirely new is asking for problems.

indigopete

That is not a very good idea.

There most definitely is something “inherently special about bitcoin trading on exchanges”. It’s nothing like trading stocks and currencies. It may look the same on the surface but it’s the nature of software projects that the 1% exceptions to the legacy business model cause you 99% of the pain. For a start you’ve got the actual underlying asset to manage as well as it’s representation on the exchange. No trading platform in the world has even envisaged anything like that.

Secondly, you have a completely different audience – potentially home users who are not professional traders.

Thirdly, legacy trading platforms are designed to interface with an electronic financial infrastructure that has far less relevance in a crypto-trading environment. Doing it from scratch with all the experience of how this industry has and is evolving and how it might grow in the future is essential, otherwise you just end up spending all of your time managing excess bagage that was never designed for what your trying to so and where half the code is redundant.

This is way by far the right strategy.

mbranton

It is exactly like trading any issued asset after its deposited. Its like trading without margin. You manage the underlying assets in normal exchange trading also. Like when you are trading cash on a regulated exchange. Secondly, the audience is only different now. I say, prepare for the future. Building an exchange from scratch may be less expensive, but it is not more robust. On the first day of trading this exchange will have successfully executed 1 real trade in the real world, Nasdaq OMX is in the trillions and counting and is used world wide. I can only expect that this is a cost saving measure and not one based on rigorous technical thinking.

This is by far the wrong strategy, but I’ve only been there, done that. So, what do I know?

I spent eight years at all levels of HFT development, from platform design up, low latency, high volume trading. I’m also a full stack developer, and am currently building software in the Bitcoin space, some of which I hope to open source soon. My opinion on this matter is fairly well informed, but we can agree to disagree. 🙂 I applaud more regulated Bitcoin exchanges, I just think they way this is being built doesn’t make a lot of sense.

Gorry James

Then you probably know, when you license software (let alone an entire trading platform) you give up flexibility and control. Every serious exchange or ECN has mostly pursued building their own infrastructure to meet their needs. This is even true for most successful prop-trading firms. I disagree that building from scratch is usually a cost savings, or that cost is usually the primary motivator for custom solutions. It’s typically a necessity to have full control over this critical aspect of your business.

mbranton

This isn’t the case. In fact several major exchanges have stopped building their own software and gone the licensing route in the last five years, Brokertech immediately comes to mind but there are others. Also it would be remiss not to mention major exchanges that have choked building their own software, like the london stock exchange in 2009. Trading contracts of any kind is a solved problem for which well established platforms exist. The Bitcoin components are separate, and are mostly back office systems. HFT firms may have a reason to build the software, but they have an entirely different mode of operation to a regulated exchange. Writing exchange software isn’t their business, running an exchange is.

Gorry James

You can certainly find cases on both sides: licensed vendor solutions/deployments that worked well, licensed solutions/deployments that were a disaster, and likewise for custom solutions/deployments. I’m not familiar with BrokerTec (had to look them up), but their parent company, ICAP, and their FX arm, EBS, I am very familiar and their technology/platform performance is notoriously a disaster. Maybe BrokerTec has awesome vendor software that EBS isn’t using yet. In any case, the argument of “software isn’t your business, trading is (or running an exchange) is your business”, is the typical sales pitch from vendors and has some merit. But having seen first hand many of the problems associated relying on vendor solutions for business-critical functions (like trading, and exchanges), I’m just much more skeptical than you seem to be that this is a no-brainer way to go. I go back to my original point, you give up a lot of control and add a dependency on a third-party for a business-critical function. I’d also add that this isn’t a binary decision. I’m guessing Gemini will rely on vendor software for some aspects of their system, where it makes sense. But licensing an entire exchange platform? Alarm bells go off. The business case for that isn’t so clear-cut, and you don’t seem to be giving them the benefit of the doubt that they understand the choices and the impact on their business. Also, if everyone defaulted to “don’t reinvent the wheel”, we’d have no new OSs, no new web servers, browsers, etc… In terms of exchanges, Nasdaq itself was “reinventing the wheel” from NYSE, and BATS from Nasdaq, etc… Gemini may very well end up with not just novel technology and architectures but entirely new business models that may be improvements on existing exchanges. I’m all for innovation and attempting to reinvent wheels.

Ian Green

I’m sure you are right, Tyler and Cameron had compelling reasons to develop their own platform, rather than license software.

By licensing a turnkey solution, you know that it will work, be stable, and that it hasn’t been designed from the ground-up to steal bitcoin, (because most bitcoin exchanges have gone on to steal bitcoin)

Cameron and Tyler are too high-profile to “do a GOX” and steal bitcoin, so even though all fraudulent bitcoin exchanges were coded in-house specifically to have “control and flexibility”, and to AVOID transparency.

Gemini will never steal bitcoin, get hacked, or pretend to get hacked (unlike Xapo, where satellites and concrete bunkers will prove to be less effective than an accountant). That doesn’t necessarily mean they want full transparency.

I’m going to ask a question of everyone, rather than give my opinion:-
———————————————————————————————-
A bitcoin ETF is highly-regulated, but that doesn’t equate to it being transparent. Their holders are a matter of public record, but an ETF can be based on a currency or commodity with anonymous holders and traders.

The blockchain is 100% transparent, but PSEUDOANONYMOUS. Bitcoin is considered a commodity in bitcoin-unfriendly New York, and is taxed like gold.

In London, bitcoin isn’t taxed like gold. Its considered a currency, so its UNTAXED like gold sovereigns (technically £1 coins). The UK is bitcoin-friendly, and more than 50% of blockchain copies were controlled by TWO UK-based companies on Feb 6th 2014
(one of which, Blockcain.info, is based in OLD York), which was a bad idea.

Here is my question:- If “Cypress” was a surname like “Winklevoss” or “Green”, would it be considered a conflict of interest for Mr Cypress to own all of the following?

1) an Exchange Traded Fund in bitcoin (which profits from price volatility in an asset as well as the asset’s value, BECAUSE IT CAN BE “SHORTED”

2) …which is based on CYPDEX, a bitcoin price index also run by the Cypress family

3)…who also run a MTGOX-style self-written centralized bitcoin exchange that ISN’T in tax-friendly London. Its in Cypress’ financial capital, where Cameron Cypress will one day be mayor

4) Remember that the Cypress family own an undisclosed quantity of bitcoin, enough to cause an uncontrolled price spike in April 2013, and to anonymously hold bitcoin at $200 for a couple of days in 2015 for calibration purposes

5) Mr Cypress has a Masters degree in Business. But you don’t need to be “the world’s leading bitcoin economist” to work all this out.

———————————————————————————————

Frankly, who cares if Cypress make a few bitcoins? Not me. Its not theft, and I don’t think “insider trading” is a crime (or even avoidable in the small world of bitcoin).

Its more important for bitcoin to avoid a Feb 2014 than an April 2013 or a january 2015.

On Feb 6th 2014, 51% of the blockchain was controlled by two bitcoin foundation members, Bitcoin’s inventor (who never profited from bitcoin or PGP) was dying from an alarming disease, and broke. Bitcoin wallets were being spammed by a hailstorm of unspendibly small payments, too fast to be resolved in one blockcain confirmation.

And 1.2 million bitcoin which were in MTGOX wallets one minute suddenly weren’t according to 51% of the blockchain. They were suddenly in the 120 wallets which received “777” payments from THIS wallet 12Nxd2X12WZeYSjUcbtm5NpS3d81Yh8sKh

It was well-intentioned but stupid, because it broke bitcoin. The covering fire of hailstones has melted away and been resolved to leave no record, but the World’s leading bitcoin economist remembers it..So do the bitcoin foundation members who resigned in disgust. Even one of Blockchain.info’s own employees, Andreas Antopoulos, resigned.

Very exciting news for the Crypto community, and for NYC. Can’t wait to see what’s next.

mark palmer

Congrats… the big difference here is you actually have a banking partnership. That has been the achille’s heel of any other would-be US -based exchange. If this succeeds, it could restore liquidity. But – which bank? And when is the beta due to open its doors?

Alex Waters

Congrats! Huge win for NYC that you guys are building Gemini here.

Paul Troon

For less then 1% of the 75 million invested in Coinbase you could fund the open source Bitsquare decentralized exchange project and help the bitcoin community. Centralized exchanges are doomed to fail in one way or another and are not a good fit for bitcoin. Good luck anyway though.

Max Entropy

Oh my…

This is what you get with a Harvard education?

– numerous grammatical errors
– no focus to the first communications coming out of the new company
– no statement as to what differentiates the Gemini Exchange from other established exchanges

Just a ‘y’all come on over’?

Oh my…

Now honestly I hate being negative. I am a big crypto fan, but ‘twins’ you would be well advised to hire a communications spokesperson.

This is a shoddy introduction.

indigopete

I quite liked it. At least I read it all – I’ve never read a single prospectus for a blue chip IPO in my life whether it be twitterm facebook, alibaba whatever. (With or without grammatical errors).

kordless

Bitcoin is a polarizing topic because it directly impacts human based trust. One way humans attempt to establish trust (or mis-trust) in other humans is by using cognitive biases. This is especially important when the person is uncertain of why they feel the way they do when dealing with matters (or offerings) which deal with trust in finance. To make matters more challenging, trusting complicated topics such as cryptocurrencies requires significant time and effort, something most of us lack.

One such cognitive bias is the ad hominem argument. Ad hominem is used as an attempt to sway trust in others by negating a person or their words in an attempt to negate the overarching concept they are presenting. Your comment is, for the most part, an ad hominem argument wielded as unproductive paranoia, as you are attacking Cameron’s statement without providing any feedback on how to improve the trust he is attempting to establish.

Cameron, you should change “our team is 14 strong (including me and Tyler)” to “including Tyler and myself, our team is 14 strong”. That should remove at least one argument someone would make against your excellent post.

Ian Green

I quite liked it too. Its not grammatically incorrect per se. It just sounds like colloquial England English, probably absorbed by Cameron in Oxford.

I’m English, and it sounds nice to my ears compared to the usual “portfolio-speak”

George Urakhchin

Please watch out for what I believe is a phishing website aimed to steal information: geminiex.com. Couldn’t hurt to let people know. Thanks!

Congrats. BTW can you tell us how the ETF is going? When will we see it?

Ian Green

XAPO managed to insure bitcoin (cough), so I’m sure this ETF will succeed even without the nuclear bunkers watched by satellites.

Somebody should tell them that bitcoins don’t physically exist, and walls won’t stop them from going walkies between blockchain addresses.

This ETF will succeed because it will allow traders to bet against bitcoin. In fact, the pseudoanonimity of bitcoin, combined with enough bitcoin to move a market, your own legitimate bitcoin exchange and this ETF would allow you to saw-tooth the bitcoin price invisibly and make money even against a general falling price.

Like a sailboat tacking into a prevailing wind, if you like. I don’t think there can be any insider trading rules for a decentralized currency. Whoever does it first will ammass more and more bitcoin and find it easier and easier if they had the infrastructure.

Are their any plans to expand outside of the US? I’m in the UK and it’s difficult to get hold of reasonably priced bitcoin here. The buy price is usually about 10% more over here than it is in the US, which has put me off investing in the past.

Ian Green

I think we pay a dividend for having a government who don’t hate bitcoin, or tax it. Then if you combine that with an exchange that is trustworthy, just a bitcoin escrow with no cash accounts, bitcoin on that exchange is actually more valuable.

Don’t believe me? Look at the localbitcoins price on Winkdex any time you like. Its going to be the highest because those anonymous, safe bitcoin are inherently more desirable. https://winkdex.com/

Big mistake. You should be building a decentralized exchange which is safe from fraud and theft. You can make money from people installing the software and take commissions from trusted nodes around the world. Doing it wrong, you are. Follow the model of Bitcoin, not conventional exchanges which are unsafe and dangerous.

Michael Goetzman

Can’t wait, it seems like the next step in this exciting advancement of future currency!

Satoshi Nakamoto

Who here is looking forward to when our currency is worth over $100,000 per single unit?
The kraken is released soon, opening flood gate to let torrent of market cap infusion set in.

Sit back and enjoy the ride.

Ian Green

I thought you died and had your body cryogenically frozen last year, ‘toshi?

MLK’s I Have a Dream

Note to self: Be first to trade on Gemini with SNP (Satoshi Nakamoto Popsicle).

I think this is great! I just want to be a part of this currency revolution! Great job guys, and much luck! I’ll be watching and participating as soon as possible!

Rene Vice

BTW – I’m a writer by trade – would love to volunteer for this project!

Tony

Mind = blown. Great work guys!

Ian Green

There was a massive spike in bitcoin’s price in April 2013 that is often blamed on “Cypress”, but was caused by one massive buyer (well, two to be exact). Whoever those buyers were h.ave the power to temporarily fix bitcoin’s price at a low level.

Bitcoin took an unexplained nosedive just before this announcement, actually. You boys wouldn’t know anything about that, would you?

A bitcoin ETF would allow people to “short” bitcoin during a falling price. Imagine if the same people

could manipulate the market AND benefit? They could end up owning a larger and larger proportion of all the bitcoin in existence, if they had an anonymous platform of their own on which to trade. I imagine.

Good luck with your exchange.

John Russo

That’s a good observation. Watching the order books of BTCe it’s so obvious of their intent you would have to be blind not to see it. I am sure that there will be more exchanges based in every city that has a stock exchange if all goes well with BTC and it proves profitable. I do believe that that most IPO’s are subject to their investors getting the lowest price possible for an entry market EFT. The initial IPO is about 20 baskets of 50,000 shares each. So the smaller investor will be left out at first. Then as they sell share by share it will raise the price for those initial investors. I do believe we might see some deliberate shorting to driver the price down for those basket buyers…I think they might have started it all ready in order to have the BTC reserve to back the EFT shares.